In his second OnPoint interview, Jim Connaughton, chairman of the White House Council on Environmental Quality, defends the Bush administration's efforts on global warming in a discussion with Greenwire senior reporter Brian Stempeck. Connaughton addresses criticism from the United Kingdom and other nations that are pressuring the White House to take stronger action on climate change, while also describing the administration's efforts to spur the development of new technologies such as carbon sequestration.
Mary O'Driscoll: Welcome to OnPoint. I'm Mary O'Driscoll. Today's topic: climate change. Our guest is James Connaughton, Chairman of the Council on Environmental Quality, and Brian Stempeck, my colleague from Environment & Energy Daily and Greenwire. Mr. Connaughton, thank you so much for joining us.
Jim Connaughton: My pleasure.
Mary O'Driscoll: In a recent speech, Prime Minister, British Prime Minister Tony Blair, said, "If America wants the rest of the world to be part of the agenda it has set it must be part of their agenda too." He is clearly drawing a link between the war on terror and climate change and other issues. So in that vein, is there any way for the United States to take that statement from arguably our closest ally in the war on terror and join in the effort to try to make some sort of international climate commitments?
Jim Connaughton: There's more than a way, it's happening as we speak. We have had a long and very productive partnership with the U.K. in particular on a wide series of technology-based initiatives related to not just cutting greenhouse gases that may be associated with climate change, but also to addressing important pollution reduction needs and other development needs in the developing world. You take the work we've been doing with the U.K., we also, in the course of the last two-and-a-half years, established bilateral agreements and partnerships with countries representing more than 80 percent of greenhouse gases, and I think you'll begin to see those discussions evolve toward a system of quite constructive action. So what Prime Minister Blair had to say is fully in sync with what we are, in fact, doing together and the agenda we're carrying forward.
Brian Stempeck: Mr. Blair clearly wants to get the U.S. back onboard for some kind of negotiation, maybe not Kyoto Protocol, but something post 2012. That's pretty much all the talk at COP-10 and Buenos Aires this year. They'll gain the United States and get a shot at getting involved. And Tony Blair had said also that he's going to make this kind of a priority at the G8 this summer. How is the White House going to respond to that? How are you guys going to, he said he wants to work with technology, PRU and those things and engage in the developing countries, how are you going to do that beyond some of the already existing effort you have with those countries?
Jim Connaughton: Well again, I want to check the question a little bit. It's not how are we going to, it's what we have in place and how are we carrying that forward and expanding and building on that? That's very important because when you read Tony Blair's Economist article, when you read his recent speech in Davos at the World Economic Forum, the themes he was striking are very consistent with the themes that the president articulated in his climate change speeches in 2001, the two he gave than and the speech he gave in February of 2002. I think what people should look at is the, actually the common ground in the articulation of what Prime Minister Blair has been saying and what the president's been saying. The common ground is in these technology partnerships. Blair said it just in the Economist article. There's not a silver bullet here, you need a portfolio of technologies, near-term opportunities, mid-term opportunities and some of the longer-term vets, like fusion energy. That is where the action is. That's where the partnerships are, and I think that is the platform on which you'll see much broader international engagement.
Brian Stempeck: What about the science though? Mr. Blair was also talking about how there is a consensus on the science that the atmosphere can't really stand anything past a 2 degree Celsius increase, that seems to be kind of the general common ground among a lot of scientists on climate change. Does the White House except that premise?
Jim Connaughton: I'm not going to get into specific conclusions about the science because, as you know from reporting on it for many years, many different people have many different perspectives on the science. We know enough from the science that this issue is a serious one, and we know enough from the science it's an issue that needs to be dealt with seriously and sensibly. So we'll continue the science enterprise and the U.S. spends more on advancing the scientific enterprise related to climate change then the rest of the nations combined. My focus, I'm not the scientist, I'm the practical policy guy, my focus is OK we have to take the issue seriously, where do we find those common currents where we can take real action? But I want to underscore the places where we can make our best action are the places where we're responding to the needs of today, combating air pollution, dealing with water and sanitation, dealing with better agricultural practices. All of which have consequences today, but each of which, dealt with appropriately, can help us put us on a strong path toward reducing the greenhouse gas portfolio of those issues as well.
Mary O'Driscoll: Well, I wanted to ask, one point that Prime Minister Blair did make in a speech was that science and technology alone can't do it. There's been a big push with the United States to work on the science and technology aspect of this issue and he says, "Not alone." So for reasons that we all know that America has come under scrutiny from the rest of the world regarding all of these negotiations and the climate and the efforts around the world to try to, for instance with Kyoto, to reach their Kyoto agreements and the United States has not been part of that. How can the United States work with other countries in that kind of spirit of, understanding of course that the United States is not part of Kyoto, but trying to work in that spirit of trying to come to some sort of an international agreement aside from a lot of these side agreements that the United States has been working on with science and technology?
Jim Connaughton: Well, I want to be a little bit careful to say science and technology alone won't get us there, I'm not sure that's how Prime Minister Blair teed this up. It is a fact that it's technologies and new practices, they are the solution. So the issue is what policies we put in place to bring forward those technological opportunities. It is about technology. Now, I'll give you a great example, the United States, working in partnership with our friends across the Atlantic and with key developing countries, just announced the Methane to Markets Partnership, right? That is a hard agreement with the U.K. onboard, with Mexico, the United States, Australia, Russia, China, India, countries that have not come forward in the context of Kyoto, but that have been willing in the context of a specific partnership to achieve a specific outcome have agreed on a framework for cutting methane, which is one of the most potent greenhouse gases, by 50,000,000 metric tons in just this first stage of the partnership. If we get the partnership right, the opportunities for highly cost-effective reductions of methane are significant. We're talking about methane that comes out of coal mining that otherwise gets vented into the atmosphere. We're talking about methane from landfills that otherwise gets vented into the atmosphere. We're talking about methane that just leaks out of badly run natural gas production and distribution systems. It's those kinds of partnerships that are going to make the real difference to reduce the growth of greenhouse gas.
Brian Stempeck: But still, long-term, I know one issue that the White House has is working on carbon sequestration, investing a lot of money through the Department of Energy, and yet all the scientists who are involved in carbon sequestration and doing the research at MIT, at Carnegie Mellon, they say the technology is getting there. This money is helping, the research money is helping, but without a price signal, without a price on carbon, there's no way a power company is going to voluntarily capture carbon from its emissions. How would you respond to that?
Jim Connaughton: Well, as we sit here today there is a price on carbon. In fact, the price in the context of natural gas is now three times higher than it was two or three years ago. There's a price on carbon in the context of coal use. Coal energy prices in America today are twice what they were two years ago.
Brian Stempeck: So do you think energy prices are enough to drive these companies to work towards carbon sequestration? I mean, that would add a steep penalty for, you know, the cost of electricity.
Jim Connaughton: No, I was answering the second part of your question, which was do you need a price signal? The price signal is the fact that there's a significant cost to energy. Now that price signal will drive new technologies. That price signal will also drive greater efficiencies. When you look around the world, the International Energy Administration, when they had done their analysis of countries like China and India and some of our other emerging competitors, the biggest, most profitable opportunities for reducing greenhouse gases, and by the way reducing harmful air pollution, you know, because they care about the health of their citizens, is through efficiency investments. Now the issue is sequestration, you have biological sequestration --
Brian Stempeck: Right.
Jim Connaughton: Which is relatively inexpensive today, and you also have the biological sequestration you get from enforcing the rule of law to prevent illegal logging, all right? That's the other piece, to prevent illegal deforestation. So that we can do, move rapidly on and we are.
Brian Stempeck: Sure.
Jim Connaughton: We have the deals internationally on that going on right now and domestically, through the new farm bill conservation programs, you're going to see tens if not hundreds of millions of dollars going to farmers and ranchers to do sequestration on their own lands. Incentive-based massive greenhouse gas reductions. Physical sequestration is a different issue. You're right to point that out. We're trying to identify the many different ways where you can capture carbon and put it to good use. The best opportunities for physical sequestration are actually, you know, injection under the ground as a means of dealing with working with our energy system. Right? That's a winning situation where you're putting carbon under the ground as you're bringing carbon up from the ground and so you're offsetting what would otherwise go to the atmosphere. Those are the ones that I think you'll see the greatest progress on and the reason is because those are the ones that can be done in a way that is economically rational.
Mary O'Driscoll: The, I'm going to change the focus a little bit, the National Commission on Energy Policy, a bipartisan group involving Republicans, Democrats, business, environmentalists, academics, recently issued a report that calls for regulation of greenhouse gases including CO2. What is the administration's response to that?
Jim Connaughton: Well, I want to take the whole report in context, especially as relates to CO2. They had more recommendations than just the recommendation on regulation for CO2. They had recommendations very consistent with the president's national energy plan on the need for more nuclear.
Mary O'Driscoll: Right.
Jim Connaughton: OK? Getting more nuclear out not only reduces air pollution, but it also, it doesn't emit any greenhouse gases. They had a whole section on renewable energy and the need for tax incentives and credits to advance nuclear energy. That's in the president's plan. You'll see massive, not just greenhouse gas reductions, but also good old-fashioned air pollution reductions from that. They have a push for increased supply of natural gas, which is a lower carbon, cleaner energy source and they had a strong emphasis, again, against some conventional wisdom, on the need for future technology path for coal in which not only is it low polluting, but also getting carbon out of coal. Now, when you take all of that, OK, there is 90 percent common ground on real actions to reduce greenhouse gases and importantly, cut pollution. Their additional point about regulating carbon --
Mary O'Driscoll: Um-hmm.
Jim Connaughton: We have a disagreement with, but again it's disagreement on one aspect of carbon strategy and the reason we have the disagreement is this, by capping carbon the current situation we face, in the next decade or two, as the best compliance choice for capping carbon is to get out of coal. And what that means is switching to natural gas. It drives up energy prices further than what I just talked about. Natural gas is already three times its prior baseline and that drives our energy intensive industries overseas. Now, leaving aside the job consequences of that and leaving aside the economic consequences of that, just looking at it purely from a climate change perspective, we do not address the need to reduce greenhouse gases by simply moving them for America and moving them to another country where they go up. Greenhouse gases are a cumulative issue. So we have to pursue the strategies that result in the application of technology to reduce the growth of greenhouse gases and to capture it here, even as we work with our friends and allies internationally, for them to pursue a similar portfolio strategy. And that's the point of departure and I really want to emphasize that in the end is a small point of departure, not a major one and yet it's the one in which everybody has this magic [unintelligible] for regulation.
Brian Stempeck: But carbon regulation is getting a lot of attention in Congress right now. You had the McCain-Lieberman vote last year and right now there some issues in the Senate where to move the Clear Skies Bill they might have to address carbon dioxide to get the votes. Are there any circumstances that the administration would support some kind of compromise, maybe not a carbon cap or strict regulation, but some kind of emphasis on carbon dioxide in a Clear Skies bill?
Jim Connaughton: Well, I'll tell you where the compromise is, the compromise is in all the titles of the energy bill that are specifically directed at bringing online new technologies for energy that will reduce carbon dioxide --
Brian Stempeck: Well what about --
Jim Connaughton: And again, I also went to emphasize, will also reduce air pollution, because air pollution is what everyone's working on today in America.
Mary O'Driscoll: OK, but --
Jim Connaughton: But now, you ask, you know you look at the energy bill, all the titles of the energy bill that will actually reduce greenhouse gases, OK, do not have the title climate change. There's also a climate change title in the energy bill that actually is more process oriented. Now, I just want to suggest to you where the common ground is is in the renewables, you know, the ethanol mandate and in nuclear and in hydrogen and in the fusion issue and in gasification for coal. That's where the common ground is. That's where you need to seize the initiative in the moment and that's where I think the greatest promise for good strong bipartisan action lies.
Brian Stempeck: But not on Clear Skies?
Jim Connaughton: It would be a mistake to hold needed health-based air pollution reductions, that we have to have in Clear Skies, it would be a mistake to hold that hostage to this longer-term issue related to reducing greenhouse gases. It really would be a mistake for the nation.
Mary O'Driscoll: Nevertheless, you know, in light of all that and the agreement on all the renewables and nuclear and that kind of thing, you still have many multinational corporations, some, many of which have operations here in the United States, that are having to deal with carbon caps in their international operations overseas in Europe. So they are starting to understand that they have to deal with it. You have some utilities actually acknowledging that they're going to have to deal with carbon caps soon. So the feeling is out there that this is coming. Why can't that part of it be discussed? What is holding it up when everybody seems to understand, the industry seems to understand, some of the states seem to understand that there are going to be carbon caps soon. Where is the federal government going to come in on this?
Jim Connaughton: The president has made clear, by setting a national goal for our economy of reducing greenhouse gas intensity by 18 percent. That is slowing the rate of growth of greenhouse gases. That's the first step on the road to stopping greenhouse gases and as the science justifies, reversing greenhouse gases. Now we're making good progress because we are pursuing a portfolio of approaches. We're not limiting ourselves to one tool. We're making good progress toward meeting that goal and that's what we're going to keep track on. I would note that when you're talking about multinationals, multinationals deal with different requirements in different countries all the time, that's their stock in trade and bread-and-butter. I would note, however, that the places where they're increasingly investing are places that do not and will never have a cap, a mandatory regulatory cap on carbon, whether it's India or China or South Africa, you name it, Venezuela, Mexico, none of those countries is, or in the foreseeable future, imposing a cap. If we want to make constructive and meaningful progress, we have to align our policies with the strategic path that is consistent with their aspirations for growth for their economy, that brings forward the technologies that will reduce, and can, they will, I have great confidence they will because we see it today, reduce their greenhouse gas portfolios as well.
Brian Stempeck: A lot of these corporations, though, what they say is you have state programs coming along. In the Northeast you have the Regional Greenhouse Gas Initiative, where they want to cap emissions from utilities. California has a new plan where it wants to require more greenhouse gas cuts from new cars sold a few years from now. How does the White House respond to that? These corporations are going to start saying, at some point, "Look, we have this patchwork regulation in the United States. Different states are doing things. We need somebody to clear this up for us, not abroad, but in the United States."
Jim Connaughton: You say many companies, none of them are knocking on my door. They're very focused on staying competitive. They're very focused on having affordable energy so they can employ people in good jobs. They're very focused on their commitment. You know, we have the utilities committed to a 70 percent cut in air pollution for the first time with something of that magnitude. That's what they're actually focused on today. There are a small number of companies that are doing the good work that they should be doing of looking at a variety of policy options in the future, as we are. Remember, the president, when he gave his remarks in February of 2002, he made it very clear the portfolio would proceed for now and we'd monitor our progress and we have to do additional measures, we would take them on.
Brian Stempeck: But are you --
Jim Connaughton: We made that very clear. So I just want to be careful when you say that many companies and that's set of issues. Now the states, it's great that the states are looking at a suite of actions as well, because they have to. The president also made clear this has to be dealt with in every sector of the economy at all levels. We are hopeful that most states will implement policies that are economically rational and won't disserve the ability to keep America competitive and I'm pretty confident that's where we'll actually end up at the end of the day.
Mary O'Driscoll: And this is where we are going to have to end up. I'm sorry we're out of time. Thank you for joining us. I'd like to thank Mr. Connaughton for joining us today and Brian Stempeck. I'm Mary O'Driscoll. Join us again next time on OnPoint.
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